Dr Natasha Evers, Marketing Discipline, NUI Galway presented this seminar "Market Opportunities - Made or Found? Some Perspectives on Opportunity Recognition and Exploitation in University Spin-Outs" as part of the Break the Barrier Seminar Series at the Whitaker Institute on 21st November 2011.

1. Break the Barrier Series – 21st November 2011
Market opportunities made or found?
Opportunity recognition and exploitation in Irish University
Spin-outs (USOs)
Natasha Evers
Marketing Discipline

2. Structure of presentation
• Landscape of academic entrepreneurship
• What makes USOs distinct from other new ventures?
• Entrepreneurship and Marketing Literature to
explain :
• Opportunity recognition
• Opportunity exploitation
• Cases of Irish USOs
• Some conjectures for discussion

3. What about University Spin-outs?
• Only received increasing attention during the past few years
both in the academic literature and in practice (Clarysse and Moray,
2010; Clarysse et al., 2001).
• “New firms created to exploit commercially some knowledge,
technology or research results developed within a
university” (Pirnay Bernard and Nlemvo, 2003, p.356)
– How do academics identify new business opportunities?
– Do they possess entrepreneurial intentions?
– What activities do they engage in for their ventures to emerge?

4. Academic spin-offs show some traits that make
them distinct from other high-tech start-ups.
• Team of academics working in own disciplinary knowledge in
closed academic circles
• Network emerge in HEI environment made up of
administration and academics and the TTO support
• Organizations have commercialisable ideas in their research
portfolio BUT differ in terms of:
– opportunity search and how their trajectory of business
development is guided and supported.

5. Summary Metrics – Ireland
2005 – present
2007 2008 2009 2010 Total
2007-2010
Licence/
Option/Assign
56 67 100 93 316
Spin-outs 13 7 35 31 86
Invention
Disclosures
271 407 457 431 1566
Patents
Applications
124 202 148 101 575

7. Some Successful University Spin-outs
• Eirecomposites (NUIG)
• Wavebob (NUIG)
• Celtic Catalysts (UCD)
• Biancamed (UCD)
• Mutebutton (NUIM)
• Ntera (UCD)
• Miravex (TCD)

8. Research objective
• To explore how opportunities are identified and
exploited for new venture creation in the context
of university spinouts.

9. Recognition and Exploitation
• Entrepreneurship begins with the formation of opportunities
which is the subject of the entrepreneur (Shane, 2000; Katz
and Shepherd, 2003).
• Opportunity exploitation can be a process dependent on the
decision of the entrepreneur and falls typically within the
boundary of the firm which, through its capabilities, manifests
opportunities into market outcomes (Whittaker et al., 2009).

10. Research questions and theoretical positioning
from Entrepreneurship/Marketing literature
Research questions
1. How do USOs identify
opportunities?
2. ) How are USOs created to
exploit such opportunities
identified?
Theoretical premise
1) Concepts of entrepreneurial
opportunity creation and
discovery
2) Theoretical Framework of
Organisational Emergence
(Katz and Gartner,1988)

11. Are opportunities identified through processes
of discovery (found) or creation (made)?
– Discovery approach (Austrian economists Kirzner 1979,1997;)
• Objectively real (ex ante entities) formed exogenously
• Founder’s alertness to market disequilibrium
• Conscious search for market opportunities
– Creational approach (Schumpeter, 1934; Sarasvathy, 2008)
• Created, endogenously by the actions of the
entrepreneur
• Creational process : “who I am”, “whom I know”
“what I know” (Sarasvathy et al. 2008)

12. Opportunity discovery - derived from market
disequilibrim
• Extant studies often make the fundamental assumption that
opportunities emerge from an exogenous environment .
• May be problematic in respect to emerging markets and fast
evolving industries such as biotech and lifescience - produce
new markets as technologies emerge…uncertainty, volatility.
• New opportunities are the result of market disequilibrium OR
the enactments of opportunities to create markets that from
the outset are imperfect per se?

13. Are opportunities identified through processes
of discovery (found) or creation (made)?
– Discovery approach (Austrian economists Kirzner 1979,1997;)
• Objectively real (ex ante entities) formed exogenously
• Founder’s alertness to market disequilibrium
• Conscious search via market orientation
– (Controversial) Creational approach (Schumpeter, 1934;
Sarasvathy, 2008)
• Created, endogenously by the actions of the
entrepreneur
• “who I am”, “whom I know” “what I know” and their
Intentions (Sarasvathy et al. 2008)

14. Founding entrepreneurs are cognitive agents that
perceive, make sense and enact their environment in
turn creating entrepreneurial opportunities.
• P1: In USO creation, academic entrepreneurs create
opportunities enacted through their endogenous
environment rather than discovering them exogenously.
• P 2: In USO creation, the human capital of the academic
entrepreneurs influences their ability to create opportunities.

15. Opportunities created (made)

16. 2nd Inquiry – Opportunity Exploitation?
Research questions
1. How do USOs identify
opportunities?
2. ) How are USOs created to
exploit such opportunities
identified?
Theoretical premise
1) Concepts of entrepreneurial
opportunity creation and
discovery
2) Katz and Gartner (1988)
four properties for
organisational emergence:
1. Resources 2. Boundary
3. Intentionality 4. Exchange

17. Realising Market Opportunity through
organisational creation

18. Entrepreneurial Intentionality and Self-efficacy
• Intentionality is a state of mind that directs a person’s
attention (and therefore experience and actions) toward a
specific goal or path in order to achieve a market outcome
• Entrepreneurial self-efficacy refers to the strength of an
individual’s belief that he or she is capable of successfully
exploiting the opportunity, thus, it can be argued:
– Intentionality of potential academic entrepreneurs
dependant on their notion of self-efficacy

19. Academic entrepreneurial intentions & self-efficacy
• Prodan and Drnosvek (2010) found entrepreneurial self-efficacy
had the highest path coefficient among all predictors
of academics’ entrepreneurial intentions.
• Entrepreneurial intentions of academics were important in
predicting the dynamics in emergence of firms with high
growth potential.

20. Propositions to explain how opportunities are
exploited for USO creation
P 3: In USO creation, academic entrepreneurs
demonstrate self-efficacy in their intention to
exploit the created opportunity

21. Resources via Relational Capital
• Entrepreneurship does not occur in a vacuum, but involves
economic actions between actors and builds upon ongoing
interaction in social relationships (Birley, 1985).
• Being part of a closed network with a high degree of
embeddedness is proposed to be advantageous.
• The ability to exploit opportunities is linked to a firm’s
position in the network as well as on the nature of
relationships.

22. Realising Market Opportunity through
organisational creation

23. Firm boundaries and relationship with
environment
• Typically, when potentially patentable knowledge is created
by university employees, the university has ownership rights
to this knowledge.
• However, it is in the interests of the university to drive as
much IP into commercialisation in return for royalities and
also academic reputation,
– hence negociation of IP rights emerge as mutual and for
benefit of creating a legal entity separate from university.

24. Propositions for USO Opportunity Exploitation
P 3: In USO creation, academic entrepreneurs demonstrate self-efficacy
in their intention to exploit the created opportunity
P 4: In USO creation, the academic entrepreneur’s access to
personal and network resources influence the resourcing
of the USO.
P5: In USO creation, the USO boundaries are influenced by the
academic entrepreneur’s relationship with their academic
environment.
P6: In USO creation, USO exchanges are mainly export-led.

25. Conjecture 1:
Opportunities were made not found in USOs
Created endogenously and enacted meaningfully by
individuals influenced by their own antecedent
knowledge corridors and beliefs
Exaptive process of creating opportunities
– an evolutionary process in which a given adaptation is
first naturally selected for, and subsequently used by
the organism for something other than its original,
intended purpose.

26. Conjecture 2
Notion of Self-Efficacy necessary condition for
opportunity exploitation
Intentionality’ in new venture creation by reinforced
by the notion of self-efficacy to create the venture.
Self-efficiacy enabled by antecedent knowledge
corridors, mediated by their access to personal
networks determine opportunity exploitation in
USOs.
.

27. Exploitation of Market Opportunity through organisational
creation (adapted framework by Katz and Gartner, 1988)